A critical illness health insurance policy provides coverage for specific illnesses that are life-threatening and have very expensive medical treatment or surgical protocols. These could include heart disease, cancer, kidney failure, organ transplants, stroke, etc.
To illustrate how critical illness health insurance plans work, let’s take a look at the following example:
Latha has bought a critical illness health insurance plan and has been diligent in paying the premiums and renewing it every year. One year, she is diagnosed with a critical illness and has to undergo hospitalisation and surgery. The recovery period is a couple of months. The critical illness health insurance plan that she had taken comes in handy at this time. After the 30-day survival period, she receives the sum insured as a lump-sum payout. She uses this for her post-hospitalisation expenses and to tide over the months that she has no salary. This helps to ease her mind and makes her convalescence period that much less stressful.
The rise in lifestyle diseases and healthcare costs have made it almost crucial to have a critical illness health insurance plan, even if you are covered under a corporate health insurance plan or have a general health insurance plan. This kind of health insurance plan provides comprehensive coverage for almost all of the major illnesses and less common ones as well. If you have a family history of any of these diseases, then it is wise to take a critical illness health insurance plan as early as possible.
A corporate health insurance policy or even a general health insurance policy may cover these illnesses, but still may not provide enough coverage for all the expenses involved. In the event that a person is diagnosed with a critical illness, if they don’t have a critical illness health insurance coverage, they may have to pay out of pocket for several expenses such as medicines, intensive care, etc., which are not covered under the general health insurance.
This will also be a time when finances take a hit, especially if the person diagnosed with the critical illness is the sole breadwinner of the family. A prolonged illness may result in unemployability for a long period of time. Having a critical illness health insurance plan ensures that your family can focus on your well-being and care and not have to worry about finances. It will also give you peace of mind that goes a long way in helping you recuperate and recover over time.
|Insurer Name||Plan Name||Age Range||Basis||Coverage Offered||No. of Critical Illnesses Covered||Co-Payment||Waiting Period|
|SBI General Insurance||Critical Illness Insurance Policy||18 years – 65 years||Individual Plan||Up to Rs.50 lakh||13 critical illnesses||90-day waiting period for all claims|
|HDFC ERGO||Critical Illness Insurance Policy||5 years – 65 years||Individual Plan||Up to Rs.10 lakh||8 critical illnesses||90-day waiting period for all claims|
|HDFC ERGO||Critical Illness Platinum Insurance Policy||5 – 65 years||Individual Plan||Up to a maximum of Rs.10 lakh||15 critical illnesses||90-day waiting period for all claims|
|IFFCO-Tokio General Insurance||Critical Illness Insurance Policy||Group Plan||9 critical illnesses and accidental injuries||90-day waiting period for all claims|
|Reliance General Insurance||Reliance Critical Illness Plan||18 years and above||Individual Plan||Up to a maximum of Rs.10 lakh||10 critical illnesses||90-day waiting period for all claims|
|Tata AIG General Insurance||Critical Illness Policy||18 years – 65 years||Individual (Retail) Plan||Up to a maximum of Rs.15 lakh||11 critical illnesses||3-month waiting period for claims|
|Bajaj Allianz Insurance||Critical Illness Plan||6 years – 65 years||Individual Plan||For ages 6 – 60 years: up to Rs.50 lakh For ages 61 – 65 years: up to Rs.5 lakh||10 critical illnesses||3-month waiting period for claims|
|Bajaj Allianz Insurance||Critical Illness for Women||21 – 65 years||Individual Plan||Up to Rs.2 lakh||8 critical illnesses||90 days waiting period for critical illness claims|
|Universal Sompo General Insurance||Critical Illness Insurance Plan||Proposer: 18 – 65 years Others: 5 – 65 years||Individual Plan||Up to a maximum of Rs.20 lakh||11 critical illnesses||90 days waiting period for claims related to critical illnesses 48 months waiting period for claims made due to pre-existing diseases|
|Bharti AXA Health Insurance||Smart Critical Illness Insurance Plan||8 years – 70 years||Individual/Family Floater Plan||Up to Rs.5 lakh||20 critical illnesses||60-day waiting for critical illness claims 4-year waiting period for pre-existing diseases|
|New India Assurance||Asha Kiran Policy||Adults: 18 – 65 years Daughters: 3 – 25 years||Family Floater Plan||Up to Rs.8 lakh||11 critical illnesses||Co-pay may be applicable if the insured undergoes treatment in a different zone, from which he/she lives in||General claims: 30 days Pre-existing diseases: 48 months Congenital diseases/defects: 48 months|
|Star Health Insurance||CriticCare Plus Insurance Policy||18 – 65 years||Individual Plan||From 18 – 65 years: Up to Rs.10 lakh From 60 – 65 years: Up to Rs.2 lakh||9 critical illnesses||General claims: 30 days Pre-existing diseases: 4 years Specific conditions (As mentioned in the policy brochure): 1 or 2 years|
These are the major differences between the two:
|Critical illness insurance||Health insurance|
|Diagnosis is sufficient to avail claim benefits||Hospitalisation is required for either reimbursement or cashless treatment|
|Payout is as a lump-sum amount that can be used for any expense||Benefits can only be used for the medical treatments and hospitalisation expenses|
|Waiting period is 90 days||Waiting period is 30 days|
|Duration is 15-20 years||It has to be renewed on an annual basis|
|Covers only a limited number of specific illnesses that are life threatening||Covers a wide range of illnesses with hospitalisation|
Before you commit to buying a policy, make sure you compare different policies keeping in mind the following important factors:
The maximum entry age ranges from 60 to 65 years. Considering that people over the age of 40 are more prone to developing new or chronic illnesses, then any time after the age of 40 would be the right time to buy a critical illness health insurance policy.
Other individuals for whom this policy would be beneficial would be:
These are the broad categories of inclusions that you can expect in a critical illness health insurance policy (these can vary from insurer to insurer so read the policy document carefully):
These are the illnesses, events, or expenses which are not covered under most critical illness health insurance plans:
Under Sections 80D and 10 (10D) of the Income Tax Act, 1961, you are eligible for income tax deductions for premiums paid and for the lump-sum payout.
These are the documents you may need when applying for a critical illness health insurance policy:
These are the documents required when requesting an initial claims assessment:
A rider may provide coverage for the same illnesses that are covered under an individual critical illness policy, but the sum insured may not be sufficient to cover all expenses. The reason for this is that a rider is dependent on the sum insured of the base policy, so if the base policy is for Rs.5 lakh, the rider only provides coverage for Rs.5 lakh. However, with a separate critical illness policy, the sum insured can be chosen without any limits by the policyholder which should be enough to cover all expenses.
This depends on the insurer, but for most, you can only raise one claim at a time for one illness from the specified list. As soon as your claim is approved, the lump-sum is paid out to you and the policy is terminated. This can later be renewed. The expenses for hospitalisation are paid under health insurance. After the survival period is over, the lump-sum is paid out under the critical illness cover.
The premium is calculated based on the applicant’s age, policy tenure, sum insured, and health status.
No, it is not possible to make a change in the sum insured when the policy is already in force but it can be increased when the policy is renewed.
Yes, this can be done easily on the website of the insurer.
There are many factors to look into many of which have been listed above. However, the Incurred Claim Ratio is an important factor in determining how hassle-free and prompt the insurer is in settling claims.
Restore Benefit is a feature whereby your sum insured is restored if it is exhausted during the tenure of your policy. This feature may not be available with all insurers but is a useful feature to have in your policy.
Yes, co-payment is possible and depends on the insurer.
You will be sent reminders to renew your policy but in case you still forget, you are given a grace period of up to 30 days (depending on the insurer) to renew your policy.
For individuals below 60, the maximum tax benefit is Rs.25,000 while for those above 60, it is Rs.50,000.
Some, but not all, insurers provide coverage for non-allopathic treatments as well.
The most common critical illnesses in India are heart attack, cancer, and stroke.
Depending on your income and other factors, your sum insured can be up to Rs.1 crore.
The minimum sum insured is Rs.1 lakh across insurers.
Yes, most insurers do provide a grace period for making premium payments which can be in the range of 15 days or more.
The apex insurance regulator of the country, IRDAI, proposed that certain exclusions of health insurance plans such as critical illnesses should be removed from the list. IRDAI wishes to increase coverage and ensure individuals get ample coverage especially for conditions like genetic diseases, mental problems, psychological disorders, and neurodevelopment disorders.
IRDAI had set up a working group to standardise the exclusions of policies. Post careful examinations of the recommendations of the group, the regulator has now issued draft guidelines for the insurance sector to take up a uniform approach while designing the exclusions in the health insurance plans.
As per the guidelines, health insurance policies cannot put down a disease, contracted after the policy was purchased, as an exclusion. Also, if an insured member’s intellectual faculties are impaired due to the usage of drugs, depressants, or stimulants prescribed by a doctor, coverage cannot be denied. Treatments for stress, psychological disorders, mental illness, and neurogenerative disorders are required to be covered under health insurance plans. Treatments associated with age-related macular degeneration, menopause-related conditions, puberty, and neurodevelopmental disorders cannot be excluded from policies, as per the new draft guidelines. IRDAI has sought comments on the guidelines, from stakeholders, until May 31.
21 May 2019
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